During the late 18th and 19th centuries, Great Britain established colonies and protectorates in the area of current Malaysia; these were occupied by Japan from 1942 to 1945. In 1948, the British-ruled territories on the Malay Peninsula formed the Federation of Malaya, which became independent in 1957. Malaysia was formed in 1963 when the former British colonies of Singapore and the East Malaysian states of Sabah and Sarawak on the northern coast of Borneo joined the Federation. The first several years of the country's history were marred by Indonesian efforts to control Malaysia, Philippine claims to Sabah, and Singapore's secession from the Federation in 1965. During the 22-year term of Prime Minister MAHATHIR bin Mohamad (1981-2003), Malaysia was successful in diversifying its economy from dependence on exports of raw materials, to expansion in manufacturing, services, and tourism.

Geography

Malaysia

Location:

Southeastern Asia, peninsula bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, south of Vietnam

definition: age 15 and over can read and write
total population: 88.7%
male: 92%
female: 85.4% (2002)

Government

Malaysia

Country name:

conventional long form: none
conventional short form: Malaysia
local long form: none
local short form: Malaysia
former: Federation of Malaysia

Government type:

constitutional monarchy
note: nominally headed by paramount ruler and a bicameral Parliament consisting of a nonelected upper house and an elected lower house; all Peninsular Malaysian states have hereditary rulers except Melaka and Pulau Pinang (Penang); those two states along with Sabah and Sarawak in East Malaysia have governors appointed by government; powers of state governments are limited by federal constitution; under terms of federation, Sabah and Sarawak retain certain constitutional prerogatives (e.g., right to maintain their own immigration controls); Sabah holds 25 seats in House of Representatives; Sarawak holds 28 seats in House of Representatives

based on English common law; judicial review of legislative acts in the Supreme Court at request of supreme head of the federation; has not accepted compulsory ICJ jurisdiction; Islamic law is applied to Muslims in matters of family law

Suffrage:

21 years of age; universal

Executive branch:

chief of state: Paramount Ruler Tuanku SYED SIRAJUDDIN ibni Almarhum Tuanku Syed Putra Jamalullail, the Raja of Perlis (since 12 December 2001)
head of government: Prime Minister ABDULLAH bin Ahmad Badawi (since 31 October 2003); Deputy Prime Minister Mohamed NAJIB bin Abdul Razak (since 7 January 2004)
cabinet: Cabinet appointed by the prime minister from among the members of Parliament with consent of the paramount ruler
elections: paramount ruler elected by and from the hereditary rulers of nine of the states for five-year terms; election last held 12 December 2001 (next to be held in 2006); prime minister designated from among the members of the House of Representatives; following legislative elections, the leader of the party that wins a plurality of seats in the House of Representatives becomes prime minister
election results: Tuanku SYED SIRAJUDDIN ibni Almarhum Tuanku Syed Putra Jamalullail elected paramount ruler

Legislative branch:

bicameral Parliament or Parlimen consists of the Senate or Dewan Negara (70 seats; 44 appointed by the paramount ruler, 26 appointed by the state legislatures) and the House of Representatives or Dewan Rakyat (219 seats; members elected by popular vote to serve five-year terms)
elections: House of Representatives - last held 21 March 2004 (next must be held by 2009)
election results: House of Representatives - percent of vote by party - BN 91%, DAP 5%, PAS 3%, other 1%; seats by party - BN 199, DAP 12, PAS 6, PKR 1, independent 1

Judicial branch:

Federal Court (judges appointed by the paramount ruler on the advice of the prime minister)

14 equal horizontal stripes of red (top) alternating with white (bottom); there is a blue rectangle in the upper hoist-side corner bearing a yellow crescent and a yellow 14-pointed star; the crescent and the star are traditional symbols of Islam; the design was based on the flag of the US

Economy

Malaysia

Economy - overview:

Malaysia, a middle-income country, transformed itself from 1971 through the late 1990s from a producer of raw materials into an emerging multi-sector economy. Growth was almost exclusively driven by exports - particularly of electronics. As a result, Malaysia was hard hit by the global economic downturn and the slump in the information technology (IT) sector in 2001 and 2002. GDP in 2001 grew only 0.5% because of an estimated 11% contraction in exports, but a substantial fiscal stimulus package equal to US $1.9 billion mitigated the worst of the recession, and the economy rebounded in 2002 with a 4.1% increase. The economy grew 4.9% in 2003, notwithstanding a difficult first half, when external pressures from Severe Acute Respiratory Syndrome (SARS) and the Iraq War led to caution in the business community. Growth topped 7% in 2004 and 5% in 2005. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the cost of government subsidies for domestic gasoline and diesel fuel has risen and offset some of the benefit. Malaysia "unpegged" the ringgit from the US dollar in 2005, but so far there has been little movement in the exchange rate. Healthy foreign exchange reserves, low inflation, and a small external debt are all strengths that make it unlikely that Malaysia will experience a financial crisis over the near term similar to the one in 1997. The economy remains dependent on continued growth in the US, China, and Japan - top export destinations and key sources of foreign investment.

Malaysia has asserted sovereignty over the Spratly Islands together with China, Philippines, Taiwan, Vietnam, and possibly Brunei; while the 2002 "Declaration on the Conduct of Parties in the South China Sea" has eased tensions over the Spratly Islands, it is not the legally binding "code of conduct" sought by some parties; Malaysia was not party to the March 2005 joint accord among the national oil companies of China, the Philippines, and Vietnam on conducting marine seismic activities in the Spratly Islands; disputes continue over deliveries of fresh water to Singapore, Singapore's land reclamation, bridge construction, maritime boundaries, and Pedra Branca Island/Pulau Batu Putih - but parties agree to ICJ arbitration on island dispute within three years; ICJ awarded Ligitan and Sipadan islands, also claimed by Indonesia and Philippines, to Malaysia but left maritime boundary in the hydrocarbon-rich Celebes Sea in dispute, culminating in hostile confrontations in March 2005 over concessions to the Ambalat oil block; separatist violence in Thailand's predominantly Muslim southern provinces prompts measures to close and monitor border with Malaysia to stem terrorist activities; Philippines retains a now dormant claim to Malaysia's Sabah State in northern Borneo; in 2003, Brunei and Malaysia ceased gas and oil exploration in their disputed offshore and deepwater seabeds and negotiations have stalemated prompting consideration of international adjudication; Malaysia's land boundary with Brunei around Limbang is in dispute; piracy remains a problem in the Malacca Strait